Treasury Secretary Henry Paulson said Friday that he still expected a huge rescue fund to help resolve problems in the credit crisis to be operating before the end of this year.Paulson, meeting with reporters at the Treasury Department, disputed suggestions that backers of the fund were having trouble attracting support for the idea. Three major banks — Citigroup Inc., JPMorgan Chase & Co and Bank of America Corp. — announced last month the creation of a multibillion-dollar fund designed to rescue a group of struggling investment partnerships.

The fund — expected to have assets of $75 billion or more — would buy securities from cash-strapped structured investment vehicles to avoid a fire sale of those assets that would exacerbate the current credit crisis.



SIVS were created by investment banks to borrow money at one interest rate and use the borrowed money to buy risky investments that return a higher interest rate.

Many of the SIVS purchased bonds backed by mortgages that have lost a lot of value this year because of rising defaults on home mortgages.

There have been reports that the lead banks in setting up the rescue fund were having trouble deciding what assets would be eligible to be purchased by the fund and that the delays in reaching decisions were raising doubts over whether the fund would ever become operational.

Asked about the status of the fund, Paulson said the information he was receiving was that the organizers of the fund were meeting their time schedule.

Paulson said this fund will not be the total solution to the credit crisis that roiled financial markets starting in August, but he believed it will be helpful.

"It will complement other market-driven industry solutions," Paulson said. "The market forces are working."

Paulson told reporters that the administration continues to push the mortgage industry to move more quickly to help homeowners whose subprime mortgages are resetting at higher rates, raising the potential that they could be forced to default on their mortgages.

He also called on Congress to complete work on legislation that would help homeowners to avoid foreclosure.